A friend recently suggested to me, I think in jest, that Craig Whyte has single-handedly decided that the British legal profession needed an economic boost, and as such has decided to try to spend as much money as possible on lawyers.

Most businesses, even very public ones, operate “under the radar” to the extent that their day to day dealings are not pored over in minute detail in the press, nor do any blogs set up to focus on such issues achieve wide circulation.

Normally, in an organisation the size of Rangers, court actions would be dealt with at different levels in the organisation, but the suggestion has been made that Mr Whyte very closely controls all of the dealings there, and is “hands on” as Chairman in a way the previous ones were not.

I thought therefore it might be useful to compile a quick (my reader will be dubious that anything I write will be quick, but here goes!) and straightforward (ditto) guide to what issues will be occupying Mr Whyte when he ventures into the plush offices of Glasgow and Edinburgh solicitors, and when he speaks to Mr Withey, his Company Secretary, and highly-regarded partner of London City firm Collyer Bristow. Mr Whyte very wisely realised that having a lawyer “in house”, for at least some of the time anyway, is a very useful and speedy way of getting legal help.

(I have written about many of these matters previously. If you want to see more, click on the relevant topic or tag on the right of the page, or use the Search box at the top.)

So – Part 1 deals with court actions.

Court Actions Involving the Rangers Football Club PLC (Rangers FC)

Martin Bain

Mr Bain’s claim against Rangers for his dismissal is scheduled for a proof hearing over a number of days in July. He claims that Mr Whyte’s actions in suspending him and, whilst under suspension telling the press that Mr Bain would not be returning to Ibrox was such a fundamental breach of the employer/employee relationship that he, Mr Bain, had had his contract terminated. Mr Bain succeeded in arresting almost £500,000 towards the claim.

Rangers announced in court that they would be pursuing a counterclaim against Mr Bain but, as yet, there has been no confirmation of the detail of that.

Mr Whyte, in previous interviews, made it clear that he did not see why he should be paying people like Messrs Bain and McIntyre (more of whom below). However it is up to the court, rather than to Mr Whyte!

As far as ongoing procedures go, it is likely that the case will pop up every now and then between now and July to deal with procedural issues. There is one such hearing fixed for today (17th January) which is listed for a 15 minute court slot. This might only be a timetabling matter, or in connection with documents or witnesses.

Some suggestions were made that it could relate to a settlement, but that is unlikely. If terms have been agreed then this can be dealt with by both sets of lawyers submitting papers to the Court, without the need, at this stage, for anyone to appear.

If, as has been suggested, the case against Mr Bain seeks to allege that he was at fault in how he carried out his duties as Chief Executive of Rangers, then, if I acted for hi, I would look to being witnesses to court who clearly rated him very highly. Amongst these would be the Chairmen under whom he worked at Ibrox – Messrs Murray, McClelland and Johnston.

Of course the tax appeal concerning Employee Benefit Trusts presently proceeding in Edinburgh (more of which in Part 3) might alter the perspective here. Should there be findings critical of Mr Bain, for example, (and I have no information to suggest that any such adverse finding will be made, nor indeed if there has been any criticism of his actions at all) the timetable for a decision by the Tribunal would allow Rangers to incorporate such negative comment into their case, as long as it was legally relevant to the case brought by Mr Bain, or the counterclaim pursued by Rangers.

Whichever way it goes, the prospect of a full hearing regarding these matters, including possible reference to anything unearthed by the Independent Board Committee of Rangers during Mr Whyte’s takeover, would be embarrassing for all concerned, but as Mr Whyte is far more in the public eye than Mr Bain now, the negative publicity will affect Rangers far more.

It is a fool’s game to speculate about the outcome of a court case without all the facts being available, but, as the song goes, “fools rush in”.

On a commercial basis, taking account of the PR aspects and the fact that, if the case goes to proof the run up to season 2012-2013 will be dominated by coverage of it, little of which will show Rangers FC in a good light, it would be better for all parties to reach a settlement. However there appears, from what Mr Whyte has said, to be some element of personal animosity here (and if there is not, then I apologise to him). In that case, and depending on the strength of the counterclaim, Rangers might decide that a stand must be taken.

The costs of a proof in the Court of Session, which, I think is down for 8 days, will run into many thousands of pounds for each side. There are a lot of very important financial decisions to be taken by both parties.

Why ought Mr Bain to settle? There is one simple reason. If Rangers enter insolvency, then he might end up, even if successful, receiving little or nothing.

Some have argued that Rangers tactic with HMRC regarding tax should be to tell the taxman that, if HMRC push for full payment, then the company would enter administration or receivership, by which method they would get little or nothing.

HMRC do not do deals on that basis. However, for any private litigant, that is a very relevant consideration.

Therefore, for all those reasons, I would expect the case to settle, for a sum far less than what Mr Bain was suing for. It would not surprise me to find that such a settlement, including payment of Mr Bain’s costs, came very close to the sums he successfully arrested in the late summer of 2011.Capita Trustee Services Ltd

This one seems to be resolved and off the books. Rangers paid up, under threat, it appears, of a further arrestment being served on them, but not until there had been adverse media comment about another case being raised against them.

Levy & McRae

This was one of the first cases brought against the new regime at Ibrox. Levy & McRae had done sterling work over many years for Rangers, dealing with the “fire fighting” activities, such as UEFA disciplinary hearings and players being arrested for alleged misdemeanours.

However, as a result, it seemed, of the close relationship between the form and the outgoing Board at Rangers, Mr Whyte dispensed with their services when he took charge.

This freed them up to take instructions from Mr Bain, and to act for him against Rangers.This case dragged out, until settlement was finally made, with the court being told that the bill for £35,000 for saving Rangers from a ban for sectarian singing needed to be checked. Of course Mr Whyte later admitted to Scotland on Sunday that he had delayed payment because he was annoyed at Levy & McRae taking Mr Bain as a client against them.However, Levy & McRae are excellent lawyers, and as such were able to ensure that they were paid, in full, and with expenses paid by Rangers.

Donald McIntyre

Mr McIntyre was the Finance Director of Rangers. He too was suspended, but remained on the books at Ibrox far longer than Mr Bain.However, he took the same route of resigning and claiming that his contract had been broken by Rangers. As mentioned above, Mr Whyte was adamant that he did not wish to pay either of these gentlemen.

Presumably he had a change of heart as, after an arrestment was successful for some, if not all, of Mr McIntyre’s claim, a settlement was agreed.

It is thought that payment was made by way of release of some, or all, of the arrested funds to him. It would appear that Mr McIntyre’s case settled in a similar way to that I would predict for Mr Bain, although there was no suggestion of there being a counterclaim against Mr McIntyre.

As I wrote at the above link, this is a case Rangers is pursuing in the Court of Session.However the defender is in liquidation. A former director of CRE8 is Lee Power, who played 25 games for Dundee, Hibs and Ayr from 1996 to 1998.

According to the Drum Magazine, Rangers were owed almost £500,000 by CRE8 when it went into liquidation.

This case, where Rangers is the Pursuer, calls again at Glasgow Sheriff Court on Friday 20th January.
The defender is a company specialising in providing lottery services to football clubs. It describes itself on its website as “The leading lottery fundraiser in the UK. Helping to raise funds for Charities, Education, Sports organisations and other societies. “

It is however, according to its last accounts, a loss making company whose current liabilities to trade creditors doubled in the last accounts.Yuill and Kyle act for Rangers. This is a leading debt recovery firm and one assumes that this is a simple non-payment action brought by Rangers.

Court Actions Involving Rangers FC Group Ltd

Fyfe Ireland

This might almost be the most embarrassing of the cases. Here the parent company was sued in a Small Claim (meaning an action for £3,000 or less) for non-payment.

Fyfe Ireland, it is understood, acted for the former Wavetower Ltd in the takeover. The type of work they did in connection with a PLC acquisition would normally cost in excess of £50,000.

It seemed daft to allow further reputational damage, and to give more ammunition to critics, by disputing the final part of a bill, especially where, in a dispute about legal fees, there are methods of having the bill independently assessed by the Auditor of Court to determine what truly should be paid.

That case settled at an early stage.

Rumoured or Possible Court Actions That Have Not Been Raised

Alastair Johnston

Mr Whyte, in his Scotland on Sunday interview in October with Tom English, stated that Mr Johnston, the former Chairman, had demanded payment of expenses in connection with his work for Rangers.

Mr Whyte made it clear in the interview that he viewed this as inappropriate. He was not for paying, and seemed almost to be urging Mr Johnston to take action.

As far as has been made public, no such action has been raised. There is no information as to whether or not the expenses were paid.

As with Levy & McRae and Mr Bain, Mr Johnston seems to have become persona non grata for his involvement before, and particularly for his Committee’s opposition to the takeover.

However, I would suspect that, for all Mr Whyte’s desire for positive PR (as undoubtedly defending such an action would have brought him amongst many of the club’s supporters), the rules regarding expenses for directors conducting club business would be so clear cut that there might not even have been the fig leaf of a defence to hide behind. A defender cannot tell their lawyer “I have no defence, but just say I do, and drag the case out”. More accurately, if the client says that, the lawyer has to say “No” unless there are areas where legitimate enquiries can be undertaken to establish the position.

As I speculate above though, there remains the possibility of Messrs Whyte and Johnston facing each other across a crowded courtroom in the Bain case.

John McClelland

When this former Chairman resigned in October, there was a brief flurry of speculation that he too was going to law.

That quickly died down and it was never clear, in any event, what the cause of action might have been.

It is possible that his resignation, at the same time as that of Rangers legend John Greig, was an attempt to distance themselves from legal responsibilities of Directors (as noted in Part 4 to follow).

If they were being kept out of the loop by Mr Whyte, as they alleged, then why stay and risk criminal penalties for alleged failures they could do nothing about?

Anyone for a wee baseless rumour?
Don’t expect Bain to settle, positioning himself in direct opposition to Whyte keeps him in the running for a directorship of a NewRangers set up outside Whyte’s control.
What has he been doing since he lost his job anyway?

Terrific work again, Paul.
At times it’s very hard to keep up to speed with the sheer volume of comment on the excellent RTC blog. It’s even harder to sift through the various sub-plots, claims and counter-claims to find the essential information and put it in its true perspective.
This mini-series of posts promises to be a most welcome reminder of the relevant material in its correct context.
Thanks for that and more power to your elbow.